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What is the required return for each security

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The security market line is estimated to bek=4% + (9.4% - 4%)β. You are considering two stocks. The beta of A is 1.2. The firm offers a dividend yield during the year of 6 percent and a growth rate of 7.1 percent. The beta of B is 0.7. The firm offers a dividend yield during the year of 6.7 percent and a growth rate of 6.4 percent.

Problem 1: What is the required return for each security? Round your answers to two decimal places.

Reference no: EM132972999

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